The federal government supports the use of biofuels—transportation fuel produced usually from renewable plant matter, such as corn—in the pursuit of national energy, environmental, and agricultural policy goals. Tax credits encourage the production and sale of biofuels in the United States, while federal mandates specify minimum amounts and types of biofuel usage each year through 2022. Tax credits effectively lower the private costs of producing biofuels relative to the costs of producing their substitutes, gasoline and diesel fuel.
cost of CO2 abatement
Despite an explosion of private investment in the U.S. liquid biofuels industry, taxpayers are contributing around seven billion dollars a year in subsidies which could be better used for other energy- and environment-saving technologies, according to a major new report released here Wednesday.